Ant Financial in talks to buy WorldFirst – first big move into the UK market

Alibaba affiliate Ant Financial is in talks to buy WorldFirst, the UK-based international payments group, for about $700m, according to Financial Times.

The deal, if completed, would mark Ant Financial’s first big move into the UK market, although its Alipay service is already accepted in some retailers.

WorldFirst, which was co-founded by former Citi bankers Jonathan Quin and Nick Robinson in 2004, handles payments and currency transfers for businesses and individuals around the world. It has offices in Africa, Asia, Europe and the US, and employs about 600 people.

Ant Financial was spun out of Alibaba in 2010, when the ecommerce company separated its payments platform, Alipay, from the rest of the company.

It has since grown into one of the world’s most highly valued unlisted technology companies, reaching a valuation of $150bn in the first half of the year. It is expected eventually to go public but has hit regulatory difficulties in that process.

Alibaba owns about 33 per cent of Ant Financial but the payments platform has long been viewed as the backbone of its ecommerce operations. Ant Financial also controls one of the world’s largest money market funds, Yu’e Bao.

The vast majority of Alibaba and Ant Financial businesses are based in China but both companies have plans to expand overseas.

Alibaba paid $1bn for a 51 per cent stake in south-east Asian ecommerce company Lazada in April 2016, and earlier this year doubled down on its expansion in the region with a further $2bn investment in the company. The company has also made inroads into Indian ecommerce.

Ant Financial has already suffered setbacks in its expansion into other markets, making the potential WorldFirst deal an important test for the company on the world stage.

In 2017 Ant Financial struck a $1.2bn deal with Texas-based cash-transfer group MoneyGram, a transaction that would have given the Chinese company a strong foothold in US payments. But that acquisition was abandoned by both sides in early 2018 after failing to gain approval from the Committee on Foreign Investment in the US.

Concerns over Chinese ownership of the personal financial data of US citizens were a factor said to have disrupted the deal.